In January 2015, Greece held parliamentary elections and the left-wing SYRIZA party ascended to power. Its leader Alexis Tsipras became Prime Minister. This was a remarkable event in Greek politics as eurosceptics won a victory for the first time in many years. Tsipras had particularly criticized austerity measures imposed by the EU and leading to his country's economic collapse and high unemployment rates. However, this article won't deal with the new PM but will focus instead on his protégé Yanis Varoufakis, a new Greek finance minister known for his harsh non-typical statements and behaviour.
Yanis Varoufakis, born in Greece, is a professor of economics and the author of numerous publications on European and worldwide economic crises. An interesting fact is that he knows a lot about game theory. Some think, that's the explanation of his unusual behaviour on the world arena. But it is mere guesswork...
As a very emotional person, Yanis often makes harsh and serious statements making the market extremely volatile without any other reasons. He is an active Internet user. For example, he has his own blog. Once named a Finance Minister, Yanis was advised to give it up, but he naturally refused. What's more, he immediately wrote that he would "continue blogging there even though it was normally considered irresponsible for a Finance Minister to indulge in such crass forms of communication.” His twitter is teeming with emotional messages and is therefore very popular.
Everything would be fine if a word of the country's Finance Minister did not matter more than an economics professor's word, however brilliant the latter may be. How do the new Greek Finance Minister's words influence the currency market and the euro rate, particularly? Hard to answer for sure. Having just joined the new Cabinet, Yanis made a statement that collapsed the security market. He declared against the troika (ECB, Euro-commission and IMF) and said he was not going to cooperate further. He also declared that Greece would not observe the anti-crisis agreement, to which the world community reacted instantly. The EU leaders are not really excited about their talkative colleague since their talks become unpredictable.
Naturally, all this results in the unstable euro. When the EU integrity is called into question and the country's economic policy is outlined through the finance minister's blog, the market grows unstable and therefore new possibilities for buying and selling may appear. However, the obvious fact is that until the newly-made Greek Finance minister Yanis Varoufakis has reached any agreement with EU leaders, the euro is much more likely to fluctuate.
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The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.